Lithium Power International Ltd (fka LTHHF)

[Dr_Vonschellan]

SIMCO's_Francisco Javier_Errázuriz open_to partnering_w/Codelco/ENAMI
Francisco Javier Errázuriz and lithium: "We want to be the first partners of ENAMI and Codelco to develop this industry"
https://vnexplorer.net/francisco-javier-errazuriz-y-el-litio-queremos-ser-los-primeros-socios-de-enami-y-codelco-para-desarrollar-esta-industria-s1864396.html April 30, 2023
Google English translation below

Our normally very very tight-lipped neighbor Francisco Javier Errázuriz sits down with journalist Victor Cofre to talk about the latest edition of the NLP plus his/SIMCO's relations with neighbors LPI and Codelco to answer the Top-28 Questions surely on everyone's mind now especially after the latest Supreme Court ruling in favor of Simbalik/SIMCO over Codelco.

Francisco Javier Errázuriz says he does not want to directly crap on MSB/LPI but in Question 15 he expresses (ie craps out) the idea that we will fail in ultimately mining 20,000mtpa using old-school brine evaporation pools (which could be averted by buying into his hoity-toity super-duper low-priced hurry-hurry-get-a-deal brand-new DLE machines now) in an environmental failure which will be "signaled" if we accidentally lower the water level in the nearby Santa Rosa lagoon by 8% using our SEA approval brine evaporation permit. Geez, talk about a vulture flying in circles over our 14-year-continaully-hammered MSB/LPI project.

Dear Francisco Javier Errázuriz, do you have any intention to mount radio_controlled directional drilling heads on your drilling rigs and drill on a slant (instead of drilling straight down) across our property line over into our portion of the aquifer and sucking out our premium brine from the Maricunga mother lode? That should have been Question 29. And question 30 should be would you dare try that drilling plan if Tianqi and/or SQM is our partner in Maricunga? Just asking.

The Doctor

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Francisco Javier Errázuriz and lithium: "We want to be the first partners of ENAMI and Codelco to develop this industry"
by Victor Cofre

The businessman who has led the Errázuriz family business for a decade wants to enter the lithium industry. He applauds the government's Policy (NLP), although he prefers private parties have control in public-private partnerships. But, above all, he promotes something that he assures is his strength, the development of Direct Lithium Extraction (DLE) technology that he is testing in the Maricunga salt flat.

What is the Errázuriz group?
Is it a group?
Francisco Javier Errázuriz Ovalle, 50, who has been in charge of the family businesses founded by his father, the former senator of the same name, responds: "It is a group of companies in different fields, mostly in the country." he says. Where are they? Salmon, automotive, agriculture, fishing, real estate, insurance, forestry, vineyards, copper mining. Size: Bills between $800 million and $900 million a year, he says. ebitda? "Respected, confidential," he replies. Francisco Javier Errázuriz operates as executive director: on the boards of several of the companies are some of his six brothers and there are also independent directors. The commercial engineer from the University of Chile speaks little in public and decides to do so because lithium interests him. One of the family companies, Cosayach, developed the iodine business since the eighties and then searched for potassium deposits. “On a rebound we came to lithium,” says Errázuriz.

In this work, the group added belongings prior to 1979, the date on which it was decreed that lithium was state-owned, strategic and non-concesson-able. Rights prior to that date are excluded from that prohibition. The Errázuriz family also has registered belongings after 1979.

The former are part of its most advanced project: a US$350 million plan to produce lithium carbonate and hydroxide in the Maricunga salt flat, in partnership with Simbalik, a Singapore fund, and where it has also developed direct extraction technology that , he assures, is a solution to the environmental problems of evaporation via swimming pools.

The second are properties in the Salar de Coipasa, a Bolivian aquifer that penetrates Chilean territory. And another 40,000 hectares adjacent to the Atacama salt flat.

But Errázuriz spends time explaining the most relevant, in his opinion, of his experience in Maricunga: in 2010, he says, his companies formed a technological consortium with the American IBC and the Japanese Jogmec and Chori to develop a direct extraction technology that recovers 99% of the lithium from brines -unlike 40% of evaporation techniques-, with less energy expenditure and without the consumption of fresh water. It allows, he assures, to produce lithium hydroxide and has meant an investment of US$ 20 million. The National Lithium Policy (NLP) encourages this technological migration and Errázuriz presents it as his great strength.

Q1. What do you think of the policy, the National Lithium Policy (NLP)?
A1. It seemed correct and comprehensive because it solves many problems by having a public-private association, which seems prudent, intelligent, and not a mere extra-activist royalty, in which one has the State as a mere collector, but rather has a partner State that can collaborate on complex projects like these. Therefore, more than criticizing it, I value it, because it has had the courage to be a Policy (NLP) that shares the principles that this government has always said and that solves many legal technical problems.

Q2. The business unions say that in this NLP policy there is a distrust of the private sector. Do you share that opinion?
A2. I do not share it, obviously, because I support it (ie NLP) and find it reasonable. The unions of the business sectors defend the role of the private sector, but the role of the private sector in this policy is defended and this has been demonstrated: the good of the private sector and the good of the public sector are shared.

Q3. Isn't the government's claim to have state control in lithium operations a DISINCENTIVE for investors like you?
A3. That is what the guilds have tried to say but the Policy (NLP) does not say so.

Q4. The Policy (NLP) speaks of a majority participation of the State in "strategic" projects.
A4. A majority have focused in that point, but he (Boric/Mario-Marcel) has subsequently clarified that it will be seen on a case-by-case basis and it will be seen what that means with respect to the majority of the income along with defining what each party can contribute to the rapid, urgent development that this industry needs. We want to be partners of ENAMI or Codelco, but not just (silent/passive) partners, to be the first partners to develop this industry. We have been working for many years so that this industry is competitive, transparent, on equal terms and we are going to be the first to reach an agreement with the State, so that this industry develops and generates wealth for all.

Q5. And are you willing to NOT be in control of a project?
A5. It has been said by the government that the control is not necessarily a corporate control, but there can be different types of control. You have to see it, negotiate it, but obviously the government and the executives that are going to be part of these negotiations are intelligent, mature people who know what they are talking about and obviously there are no incentives if they are in the majority. With majority control, nobody is going to invest a lot of money, because here you have to invest a lot of money.

Q6. The Coipasa and Salar de Atacama properties date from after 1979. Do they have any economic value today?
A6. They have a lot of economic value, because the Mining Code, in its articles 7, 8 & 9 -you have to read all three to understand it well-, establishes that a public-private association must be reached. First, the state owns the lithium. The State can exploit it through State companies or by CEOL (Special Lithium Operation Contract) or by administrative permit. But Article 9 says that any owner of new belongings who discovers non-concession-able substances, has to inform the State that he (ie the miner) has found those non-concession-able substances. In the case of lithium the State must reimburse the money (the equity investment) to the owner of the mining concession to separate it out on behalf of the State. That is why the lithium industry has not been able to develop, because it is blocked: the State is the owner, but the right is in the private sector to separate it out with the State's money.

Q7. And this Policy (NLP) unlocks it?
A7. And this Policy (NLP) unlocks it, because an association is made, where the State contributes what it has, the lithium; the private (ie miner) contributes the exclusive right to exploit it, to separate it, and (earn) the money. Therefore, for both parties it is solved. That is why Codelco has not fulfilled its CEOL granted in 2018 in Maricunga.
Q7a ....because why exactly?
A7a. Because you cannot enter the property of a third party because they are going to tell you, listen, I am the only mining concessionaire that has the right, the obligation and the exclusive right to separate the lithium (ie from all the combined ore), if I find it, not you.

Q8. Is the idea to develop the Atacama and Coipasa salt flats?
A8. If we reach a public-private partnership with the State, we will be the first to develop these projects.

Q9. What is the priority for you as a group; Coipasa, Atacama or Maricunga?
A9. We have the technical and economic capacity to carry out all three in parallel.

Q10. What is the most advanced?
A10. Maricunga, because since we have the permits from the CChEN (Chilean Nuclear Energy Commission), we explored, the deposit was identified to its full extent, the engineering was carried out, the RCAs were carried out and most important of all, which is the great advantage that the Errázuriz group has today, since in 2010 a consortium was formed to search for the best DLE Direct Lithium Extraction technologies. This salt flat, being the second in size, it is impossible to extract it by evaporation, because it would generate an environmental problem. That is why this National Lithium Policy (NLP) is very current, very futuristic, very farsighted, because it forces the private sector to make a quantum advance in production, using direct extraction technology.

Q11. A. DLE Direct Lithium Extraction technology is not proven on an industrial scale anywhere in the world.

A11. That is what people who do not know the subject and are not at the technological forefront of direct lithium extraction say. That is what those who have traditional technologies say and do not want competition from direct extraction technologies.

Q12. Can you name a deposit that has large-scale direct extraction technology?
A12. Salar Centenario Ratones, an association between Eramet and Tsingshan, which is under construction in Argentina.

Q13. Can I ask if that it is in operation?
A13. And will start. That plant operated for more than two years with a relevant industrial-scale pilot plant. This is real. In Chile, the Errázuriz group finished building its industrial-scale pilot plant, which will produce 70 tons of lithium hydroxide directly, this is not a laboratory, it is not a pilot plant in a couple of containers.

Q14. Three separate operators do not work smoothly in Maricunga, Codelco has said. There is also Salar Blanco. Is consolidation the most logical solution?
A14. In Maricunga there is no room for any participant with solar evaporation. Therefore, the one that does not have direct extraction does not fit.

Q15. It refers to Salar Blanco (ie MSB/LPI), which is the only one with RCA approved by the Ministerial Committee and is with solar evaporation...
A15. I don't want to talk about the competition, but to our knowledge in Maricunga, which is very abundant, it does not allow for solar evaporation if you do not want to affect the Santa Rosa lagoon and the National Park. Anyone who wants to risk investing millions of dollars should do so, but I assure you that he will end up paralyzed. This is the RCA that they have obtained: if there is a decrease in the level of flora and fauna of more than 8%, it has to stop. Traditional technologies have a great environmental impact, they have a very poor recovery of lithium maintained in the brine: maximum 35%, 40% in the best brines, which are in the Atacama salt flat, not in the Maricunga salt flat. And this technology, ours, has zero impact, on the aquifer, on fresh water...

Q16. People discovered (ie reverse-engineered) the formula for Coca Cola...
A16. Yes, and I'm honest: it's very simple, so we're not going to be the only ones to discover it: Eramet and Tsingshan have already discovered it, and there are other technologies that are all heading that way. Therefore, we thank this government for having listened to the industry, scientists and new technological advances to force private companies to set high goals that force them to develop technologies. We have reached the goal after 13 years of producing direct extraction, without evaporation and without consumption of fresh water, we are very proud.

Q17. But will they have to prove that in conversations with the partners or with the competitors of the Maricunga salt flat...?
A17. When we arrive at results it is because they are true. In a couple more weeks we are going to have an inauguration in Copiapó, with all the authorities, where what (DLE) we are promoting will be demonstrated in situ...

Q18. Have you had conversations with Codelco or Salar Blanco?
A18. We have not had a conversation with Codelco, we have first had to work internally to reach this objective of concrete facts, to talk about concrete things. I hope Codelco doesn't have time to talk about assumptions and illusions and we don't have time to talk about illusions or assumptions. With concrete facts like these, we can now make the National Lithium Policy (NLP) a reality…

Q19.... and have you talked with Salar Blanco? (First attempt for a Yes or No answer)
A19. … we want to make the National Lithium Policy (NLP) a reality before the end of this government; We have the technological, financial, technical, and professional capacity to make the National Lithium Policy (NLP) a reality, hopefully to produce before the end of this government.

Q20. Have you had conversations with Salar Blanco? (Second attempt for a Yes or No answer)
A20. Salar Blanco (MSB/LPI) is our competition, we have normal and fluid relations with competitors.

Q21. But can you imagine a partnership with them? (Third attempt for a Yes or No answer)
A21. And why not? We have always said, please, come and see our technology, it is working for us, it is working for us, see it.

Q22. And have you been to see them (ie MSB?LPI)?
A22. They are cordially invited. And they will go. We are currently in the technology demonstration phase and they are going to be invited and we have issued a public invitation to all lithium projects.

Q23. Are you in favor of consolidating the Maricunga salt flat into a single operator?
A23. If it is for the good of the project that can be developed, happy. We are the first to want more competition, more production, more wealth for Chile and to share that wealth.

Q24. You asked to advance the tender for the Atacama salt flat. Does the Policy (NLP) of renegotiating with SQM seem appropriate to you?
A24. The National Lithium Policy (NLP)is very appropriate, is very courageous, is very visionary, was framed in the case of the Atacama salt flat. The Atacama salt flat has an RCA to produce until 2030, but since the National Lithium Policy requires that new technologies be by DLE Direct Lithium Extraction, this leads the State and SQM (Soquimich) to have to advance this decision (ie to upgrade to DLE), because SQM (Soquimich) itself has said that any new investment from 2030 onward needs at least seven years. And CORFO needs to make a decision seven years before (2030) to produce in the Atacama salt flats in a sustainable way, with DLE (Direct Lithium Extraction)...

Q25. I mean, do you agree?
A25. First, I agree. Second, it is legally in accordance with the contracts, because the contracts say that this bidding has to be done no later than 2027.

Q26. But this is not a Tender (ie bid-able event)...
A26. It is a voluntary negotiation that I, if I were Soquimich (SQM), would be very grateful to, because it allows him, seven years in advance, to see what will happen in 2030. For the rest, Soquimich himself was asking for it. If Soquimich discards it, he would be making a serious mistake.

Q27. Even if you cede control to the state?
A27. But if the control has always been of the State, if it is the owner. Look, those are details that the State will have to see: Mr José Miguel Benavente (at CORFO) has demonstrated his lucidity, his common sense, his intelligence. The CORFO technical group, I know them, knows what he is talking about. The Codelco technical group, with Eduardo Bitran now being there, who knows the business backwards and forwards, having the technical capacity of Mr. Máximo Pacheco, being a former executive of a large transnational, I have no doubt that they will negotiate well for the benefit of the State and they will to see the best associativity for the parts.

Q28. The Errázuriz group has had, in the past, histories of many conflicts with partners and competitors. Does the Errázuriz group have a good reputation to be a partner of the State?
A28. Look, what you say... we have not had any conflicts with competitors in the 14 areas that we have. Our conflict is known in a single item that I want to omit because...
... with SQM?
…I want to omit them (SQM) because this interview is about the development of the country and lithium. The level of conflict of this group does not exist. Today we do not have conflict, except in a single item. And evidently in those areas, which I am not going to mention, where there is a great player who does not want competition, he acts aggressively, destroying the competitors. The group is there so that there is competition and if it is necessary to promote it, we will promote it. I want the lithium industry to be promoted everywhere now because, if not, the old one (ie the boom) is going to pass us by.